Drilling Deeper: Going Inside the Machine, and More

Recent activities in the patch reveal an industry that never stops looking for answers.

Blackeagle Completes Grand Mesa

Blackeagle Energy Services, a leader in the utility and energy industries, announced Oct. 26 that its construction work on the origin stations for the Grand Mesa Pipeline project for NGL Energy Partners was on track to be complete by the end of October 2016. The origin stations near Lucerne and Riverside, Colo., will gather crude oil from Weld County and transfer to NGL’s storage facility in Cushing, Okla.

Blackeagle Energy Services has contracted since April 2016 as the general contractor to provide civil, mechanical, and structural construction services for the origin stations, said Superintendent Gary Evans. These services have included concrete work, fabricating and installation of pipes; equipment set up; and the erection of structural steel.

“This has been an important project and very successful for Blackeagle. We’ve kept it timely and on budget for our client,” Evans said. “The construction project has benefited Weld County in Colorado, and the pipeline will continue to help the long-term tax base in the region.”

For more information on the Grand Mesa/Lucerne Riverside Project or Blackeagle Energy Services, contact Vice President of Corporate Development Todd Erickson at (970) 344-6185 or visit www.BlackeagleEnergyServices.com.

About Blackeagle Energy Services:

Exceeding client expectations since 1986, Blackeagle Energy Services is a premier provider of services to energy companies that need the job done right the first time. Blackeagle specializes in building and maintaining our nation’s energy infrastructure with pipeline and facility construction, integrity management, field maintenance, and fabrication. Based in Berthoud, Colo., Blackeagle operates from the Rocky Mountains to the Gulf States, across the Great Plains and into the Northeast.

Oil and Gas Investments as “Systemic Risk”?

A new IHS Energy report disputes concerns by some central banks and regulators that climate change may pose “systemic risk” to the financial system.

This view was articulated by Mark Carney, governor of the Bank of England, who declared in a September 2015 speech that climate change—in particular “transition risk”—could threaten financial stability via a sudden and significant collapse in asset values.

In response, the Financial Stability Board, which reports to the G20 governments and is chaired by Governor Carney, launched a task force to develop a climate risk disclosure framework for market participants. The task force will release its voluntary, unified guidelines for climate risk disclosure in December 2016.

A key consideration in this debate is the valuation of oil and gas reserves. In his September 2015 speech, Governor Carney cited the “carbon bubble” thesis, stating that a key risk to financial stability could come from potential sharp drops in the valuation of oil, gas, and coal companies, owing to stranded reserves that may never be produced.

However, IHS Energy research on oil and gas company valuations in the financial marketplace has shown that the risk of overvaluation of these companies is limited, owing to how fossil fuel reserves are valued and contribute to the market capitalization of oil and gas companies.

Oil and gas company valuations are primarily based on reserves that will be produced and monetized over a 10–15 year period—a relatively short time frame in which an energy transition is unlikely to unfold.

The IHS Energy analysis also found that about 80 percent of the value of most publicly traded oil and gas companies is based on their proved reserves, which accounts for roughly 20 percent of the resource base of global international oil companies by volume. Their valuation is based on the present worth of expected cash flow from projects and reserves that will be produced in the short to medium term and are consequently at minimal risk of being stranded.

The oil price decline over the past two years has provided a real-life, high-intensity, externally driven “stress test” for the oil and gas sector and its potential to have any broader systemic impact, the report says.

According to IHS Herold, 82 global oil and gas companies lost 42 percent of their market value from June 2014 to December 2015—equal to $1.4 trillion in market capitalization. Yet, this fall has had minimal systemic impact on the global financial system thus far. Since oil prices fell below $100/bbl in September 2014, the Dow Jones Index has risen 6 percent.

The history of past transitions suggests that the unfolding of a lower-carbon energy economy, possibly supported by carbon capture, will also be a gradual process that can be priced in by the market over time, the report says. The energy economist Vaclav Smil, an expert on energy transitions, has noted that “even a greatly accelerated shift towards renewables would not be able to relegate fossil fuels to minority contributors to the global energy supply anytime soon, certainly not by 2050,” the report notes.

Overall, the report says, any transition that unfolds over decades—as would take place with any energy transition given the extensive amount of capital invested, the long life spans of energy assets, among other factors—does not constitute abrupt systemic risk to the financial system.

Documentary filmmaker Brian Nunes and his small camera crew spent a total of 16 days on a working oil and gas exploration rig off the coast of Alaska. As of Sept. 21, he was seeking funds on Kickstarter to turn the footage, which he has described as “incredible,” into a film.

The Machine – A Documentary Film (PRNewsFoto/Brian Nunes)

Synopsis: The Machine is a fly-on-the-wall film that transports viewers to a working jack-up rig exploring for oil and natural gas in the unforgiving Cook Inlet (aka Kitchen Lights). Its striking visuals, minimalist soundtrack, and fascinating “salt of the earth” characters combine to create an experience rather than preach politics.

The Machine – A Documentary Film (PRNewsFoto/Brian Nunes)

About the Filmmaker:

Brian Nunes is an award winning Seattle-based filmmaker. This will be his fifth major film project, fourth as a director. His first feature, Find Your Way: A Busker’s Documentary, won multiple awards on the festival circuit and screened at the CBGB Music and Film Festival, the largest film and music event in the country by attendance. His latest feature (HEART: Flatline to Finish Line) is in the process of securing distribution.

As a filmmaker Brian is interested in looking at things in new ways—shining a light on topics that people may have already made their minds up about.

The Team:

Dan McComb is the principal photographer for The Machine. Dan is an Emmy-nominated filmmaker with a long list of high profile clients. His work as a photojournalist has appeared in newspapers and magazines including Time and Newsweek. Some of his more recent work as a director of photography was for Emmy-winning director Michael King and two-time Oscar nominee Kirby Dick.

Lisa Cooper assisted in producing and provided sound for the project. She is currently a senior producer for a creative agency that specializes in branding, marketing and story-telling.

Filmmaker’s statement:

The oil and gas industry is something everyone is talking about but few know much about—other than its wild profitability. Like it or not, though, we must come to terms with the fact that all our modern conveniences and advanced medicines are tied to the fossil fuel industry in some way.

If we are to survive the fossil fuel age and enter a clean, renewable future—the technologies that get us there will have been made possible by the very industry they were designed to save us from. Perhaps we will look back on this age of dirty fuels and wonder how relics like this clunky behemoth were able to give birth to the clean, efficient and renewable energies that saved the planet.

Access is a dual pipeline system with pumping and measurement facilities used for transportation of diluent and bitumen blend between heavy oil extraction facilities in Northern Alberta and terminals in Edmonton. Under the terms of the transaction, Devon’s thermal-oil acreage is dedicated to Access for an initial term of 25 years. Details on the project can be found on Wolf’s website at wolfmidstream.com.

As Independent Engineer, E3 had responsibility for reviewing the project’s construction, operations, maintenance, technical feasibility and economic viability. The E3 team, led by Executive Director Al Rettenmaier, addressed the technical and commercial aspects, evaluated specific risks and uncertainties, and offered a prognosis on project success. “Our team found the Access Pipeline system to be a high quality asset, built to a high standard,” Rettenmaier said. “This helped streamline our work, making for a successful financing.”

About E3:

Founded in 1999, E3 Consulting is a leading technical and strategic business advisor to the energy industry, with headquarters in Denver, and offices in the New York City metro-area and Houston. E3 provides reviews of energy, industrial, and public infrastructure projects for capital providers, project developers and owners, utilities, and regulators. E3 is a NAES company.

About Wolf Midstream:

Wolf is a private company based in Calgary dedicated to building, owning, and operating energy infrastructure. Wolf management has a long track record of operating energy infrastructure assets in Western Canada and previously led Mistral Energy Inc. and Taylor NGL Limited Partnership.

B.O.L.D. Approach for Succeeding in Business

by Jill Johnson

International pop singer Madonna had a major hit song in the 1980’s titled “Material Girl” with catchy lyrics that included the line, “We are living in a material world.” Fast forward to today, and we are now living in a world that’s highly unpredictable. Our economic, political, and social environment is exceptionally volatile, uncertain, complex, and ambiguous. It has become increasingly difficult to develop strategies for success when every time you turn around there is another challenge that threatens your enterprise survival.

One of the most effective methods you can employ to navigate in this unstable business climate is to take a B.O.L.D. Approach. This four-point framework will focus your strategic mindset on gaining the insight and critical skills you need to thrive.

Business Strategy – Grow your organization with purpose and prosperity.

Rethink your approach to planning. Stop engaging in strategic planning focused on fun, bonding events where you vision-quest about idealistic wishes for your future, resulting in ineffective plans and written reports that collect dust.

Focus instead on grounding your planning efforts by gaining the information and insight you need to develop effective business strategies. Leverage the emerging opportunities available to you and minimize the risks that an uncertain business landscape creates for your enterprise.

Those who thrive in an unstable environment focus on understanding the potential future of evolving trends. So what do you do now? Let go of old ideas. Coalesce your business strategies around innovation and adaption.

Build your sustainable success on a viable future that is grounded in a full understanding of your situation, not on wishful thinking. Manage your transitions effectively by hiring more sophisticated talent to match your evolving needs. Consider how you can leverage new opportunities to enhance your operation and profitability.

Effective strategic planning in turbulent times requires a deep assessment of your market opportunities. This environment is driven by significant market forces influencing your enterprise success and long-term potential. These market forces impact your business lifecycle and the on-going value of your product or service offerings to your consumers. You must fully understand the impact of the market forces determining your ability to survive and thrive.

Staying close to your target market is crucial to your long-term success. But market needs, wants and desires change over time. You must understand how your market is changing and why. To remain feasible, you need to determine what you need to change to meet those evolving market needs.

You have no control over these market forces. Yet you continually have to adapt and adjust your strategies to respond to them.

Leadership – Lead with confidence and effectiveness.

It takes many, many hours to master a skill or hone your expertise. Don’t expect to be an effective leader in the beginning. It takes time. Building your insight to effectively navigate stormy strategic waters will take time too.

Asking the right questions is the foundation of an effective strategic mindset. Yet learning to ask the right questions is extremely difficult because most people only ask superficial questions that have easy answers. Asking challenging questions allows you to deepen your understanding of the impact of each market force and their influence on your long-term potential for success.

Effective leaders in turbulent times are not afraid to listen to divergent perspectives. They understand that their ability to take corrective action before things go completely haywire requires candor from their teams and a full understanding of the market forces.

Confident leaders use objective advisors to get to the truth and to push their teams. Look for real expertise that has proven results. Stay away from advisors offering strong sales hype and marketing sizzle. They can do lasting damage to your enterprise.

Decision Making – Gain the clarity you need to thrive.

Effective decision making in an uncertain and unstable world begins with a desire for clarity. Gaining clarity requires a complete and candid understanding of your situation. Truth gives you information. Well-researched information gives you insight. Insight gives you the clarity you need to set the right priorities and focus your team on the most critical activities impacting your success.

Make sure you are not operating under a false set of assumptions that were correct at one time, but have not been updated to reflect your current situation. If your assumptions are wrong, your ability to make good decisions will be severely limited by your skewed viewpoint.

It is critical that you reassess your assumptions about the future. Getting the right information for effective decision-making is essential. Look for more than superficial answers to the critical issues you face. Be willing to invest the time and money to bring in a fresh and different point of view to discover the truth.

The value of taking a BOLD Approach?

By taking a B.O.L.D. Approach, you will integrate an action plan for uncertainty into every facet of your strategic mindset. By asking challenging questions to understand your current and evolving situation, you will build your confidence that you are developing the business strategies to enhance your success. You will uncover the potential in your markets. You will be a more confident and effective leader. You will make better decisions.

As a result, others will be more confident in following your lead. If you demand more of yourself and your team, they too will think more strategically, become more effective leaders, make better decisions and achieve results designed to create lasting success for your enterprise.

So take action now. What is the first B.O.L.D. Approach step you will take to address the impact of uncertainty and volatility in your enterprise?

About The Author:

Jill Johnson is the President and Founder of Johnson Consulting services, a highly accomplished speaker, and an award-winning management consultant. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted nearly $4 billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill Johnson, please visit www.jcs-usa.com.

TruStar Energy, one of the nation’s leading developers of compressed natural gas (CNG) fueling stations, announced, on Oct. 5, the grand opening of a CNG fueling station for Rogue Disposal and Recycling, Inc. The CNG fueling station, which will be known as “Rogue Green Fuels, LLC”, is located at 1125 Anthony Way in White City, Oregon, and will serve both the solid waste service provider’s growing CNG- fueled fleet, as well as the public.

“We live in a region where the quality of the air we breathe is an everyday concern for our citizens. We believe that clean air is critical to our communities’ long-term sustainability, quality of life and economic success. To that end, we are proud to be part of an effort to bring greater access to cleaner burning transportation fuels like compressed natural gas to the Rogue Valley,” said Lee Fortier, Engineering Manager, Rogue Disposal. “We are pleased to be partnering with TruStar Energy on this new CNG station.”

The company will be using the station to fuel their existing CNG fleet, and anticipates opening their station to the public this fall. This will be one of only three publicly accessible CNG fueling stations along a 400-mile stretch of the I-5 corridor, between Chico, California and Eugene, Oregon.

“Building out the CNG fueling infrastructure is a vital piece of the puzzle to making cleaner alternative fuels available to leading companies, such as Rogue Disposal. This station makes both financial and environmental sense for the company,” said Scott Edelbach, General Manager of TruStar Energy. “TruStar Energy is proud to support Rogue Disposal’s goals to reduce its carbon footprint and bring CNG to the Rogue Valley.”

Rogue Disposal’s conversion to a CNG-fueled fleet supports the company’s commitment to sustainability. Rogue has eight CNG-fueled recycling and waste collection trucks in its fleet of 36 vehicles, with three more on order currently. The company plans to complete a total conversion of the fleet over the next eight years.

Part of the Rogue Valley community since 1938, Rogue Disposal provides solid waste and recycling collection for residential, commercial and industrial customers; as well as providing medical waste collection and on-site confidential document destruction.

Rogue Disposal awarded the CNG fueling station contract to TruStar Energy because of the company’s development and construction process that results in stations being completed on time and under budget. Ground was broken on the station in February 2016.

The fast-fill station has three 200 HP Ariel compressors, packaged by ANGI, a PSB gas dryer, and two ANGI fast-fill dispensers. The station is capable of producing almost 11 gasoline gallon equivalent (GGE) per minute.

CNG is insulated from the price volatility of diesel and gas resulting from international conflicts and events, which in recent years have been responsible for dramatic price fluctuations. As for the environment, CNG-powered engines are clean and quiet; produce 30 percent less greenhouse gases; and do not need the costly exhaust after-treatment devices and diesel exhaust fluids required for diesel engines. Natural gas engines also have an average of 80 to 90 percent lower noise decibel level than diesel engines.

TruStar Energy, a subsidiary of Fortistar, is one of the nation’s leading developers of Compressed Natural Gas (CNG) fueling stations. With decades of experience in trucking and fueling, the company’s professionals are experts at designing and building CNG fueling stations that are ready on time, on budget and that are profitable for their owners.

TruStar Energy puts fleet owners in the driver’s seat by offering best-in-class, realistic and affordable options to meet a full range of fueling needs. For additional information, visit www.trustarenergy.com.